ThermoGenesis Holdings, Inc.

Net revenues were $2.2 million for Q3 2023, up approximately $100,000 from the same period last year. Gross profit was $400,000, or 18% of net revenue, in line with Q3 2022. SG&A was $1.7 million versus $2.0 million last year; interest expense was $2.1 million versus $1.4 million last year. The company reported a comprehensive loss attributable to common stockholders of $3.6 million, or $1.44 per share, versus a comprehensive net loss of $3.2 million, or $4.66 per share, in Q3 2022. Cash and cash equivalents were $4.0 million at September 30, 2023, compared with $4.2 million at December 31, 2022. Management said CDMO revenue should start being recorded in Q4, with larger revenues expected in 2024 and gross margin expected to increase in 2024 as CDMO revenue ramps.

CEO Chris Xu framed the quarter as part of a broader transformation from a medical device company into an integrated CDMO focused on cell and gene therapy. He emphasized the official launch of the 35,500-square-foot cGMP facility in Sacramento, the nationwide shortage of CDMO capacity, and the company’s ability to offer turnkey development and manufacturing support. Xu’s tone was optimistic and strategic, repeatedly highlighting that the company is building for long-term demand rather than just leasing space.

CFO Jeff Cauble focused on the quarter’s financial bridge and the near-term revenue setup. He noted Q3 revenue of $2.2 million, gross profit of $400,000 at an 18% margin, SG&A of $1.7 million, and interest expense of $2.1 million, with the higher interest burden driven primarily by non-cash amortization. He also pointed to $4.0 million of cash and cash equivalents at quarter-end and said the company has several customers in process, a couple of finalized contracts, and expects CDMO revenues to begin in Q4 with larger contributions in 2024.

The main analyst question focused on demand for the new CDMO launch, how ThermoGenesis is marketing the services, and whether the company can expand the suite count if demand warrants it. Management said clients are starting to move in, they are using agents and brokers to market the facility nationwide, and they already have several active contracts with a couple finalized. On expansion, Xu said the company has extra space for more GMP suites if needed, and that the current suites are already designed to support CAR-T manufacturing without additional upgrades.